Physicians are in the top 5% of earners but more and more are experiencing burnout from financial stress. Physicians graduate with an average of $300K in debt and have a decade less to earn than other professionals as a result of rigorous education and training requirements. The leap in income from residency to practicing physician is profound but most doctors graduate without exposure to any financial education. Earned is a data-driven wealth management platform exclusively for doctors to take control of their finances from a single location. The company takes a holistic approach to a physician’s personal and business finances and planning with a focus on investment, career trajectory, tax planning, trust and estate, debt, revenue maximization, insurance, and cash management. Emerging out of beta, the company has rebranded to Earned from Forme Financial and has worked with physicians in 24 states since its launch last May, and has saved clients an average of $77,000 in taxes alone.
AlleyWatch caught up with Earned CEO and Cofounder John Clendening to learn more about the business, the company’s strategic plans, latest round of funding, and much, much more…
Who were your investors and how much did you raise?
Earned raised a $12M Series A led by Hudson Structured Capital Management and Breyer Capital, with meaningful participation from founding partner Juxtapose.
Tell us about the product or service that Earned offers.
We are full stack, so we offer advisory that optimizes each key aspect of a physician’s financial life – career, investing, taxes, insurance, lending, cash management/budgeting, and trust & estate.
Access is simple – clients are paired with a hand-picked, physician-trained CFP. In our hybrid model, clients stay on top of their current and predicted financial situation, as well as collaborate with our team through our website and app.
What inspired the start of Earned?
For most physicians, wealth management has been a fragmented and complicated experience where every step of the process is siloed, from debt management to investments and tax planning. While this is universally true, physicians face unique financial complexity that emanates from their careers. Due to their extended education and training, they have a decade less to create enough wealth to retire. On top of this, in a moment, they see as they get their first full-time job, their incomes increase by 5-15x, yet on average they have $300K in debt. And they are facing remarkable changes in employment types. This all adds up to distinct needs and attitudes.
How is Earned different?
Earned stands alone in our combination of a highly attractive vertical + full stack financial services + deep technology that makes our product 2x as performant as incumbents.
What market does Earned target and how big is it?
We target high-earning professionals starting with physicians who spend $13B a year on our targeted financial services. It’s a largely recurring revenue business at ~ 80% margins, with 107% net revenue retention.
What’s your business model?
We purposefully keep this simple – all our services, including tax prep, trust & estate review, insurance optimization, and more – are bundled into a single fee on assets under management. We can have the greatest impact by accelerating wealth for our clients, reducing friction, and giving them time back when we service them comprehensively. We serve through a hybrid model of physician-expert CFPs and a website and app that enables our physicians to engage with us in a manner most convenient to them, fitting their busy lives.
How are you preparing for a potential economic slowdown?
We feel very good about the strength of our underlying business model and we are built to endure any cycle. When the markets get choppy, people question their current solution, inherently favoring Earned as the upstart. We will continue to have an unwavering focus on our physician clients and the value we deliver for them – a mentality that we see as lacking in the broader industry and a huge opportunity for us. We have built a wealth system that can add value regardless of market conditions.
What was the funding process like?
Clearly, the bar was raised throughout last year, so we found investors to be very discerning. That played in our favor. It was a great opportunity to tell our story and remind ourselves about the challenges physicians face in navigating their career and finances – all of which point directly to the solution Earned offers. It is a hugely motivating audience to build for, and that universally resonated throughout the process.
What are the biggest challenges that you faced while raising capital?
We focused on being very clear on our progress and core thesis, and how the thesis was sharply differentiated. These along with the remarkable unit economics we evidenced set Earned apart.
What factors about your business led your investors to write the check?
Our series A investors got excited about four cut-through elements:
- Incredible addressable market of $13B in revenue per year, combined with unbelievable unit econ – think annual revenue in the $10K to $20K range per year at strong gross margin – like a SaaS business
- Power of a verticalized approach and how this enables us to uplevel the experience and accelerate tech dev → driving dramatically better product
- Team – a great fusion of the skill sets and experience to win
Traction – positive early feedback from physicians, along with the industry-leading product efficacy that evidenced reliably far better outcomes for our clients. We are taking accountability for client outcomes in an industry entirely devoid of it. The opportunity to disrupt the almost trillion-dollar wealth management industry by showing clients the potential of wealth acceleration is what most excites our investors and us.
Traction – positive early feedback from physicians, along with the industry-leading product efficacy that evidenced reliably far better outcomes for our clients. We are taking accountability for client outcomes in an industry entirely devoid of it. The opportunity to disrupt the almost trillion-dollar wealth management industry by showing clients the potential of wealth acceleration is what most excites us and our investors.
What are the milestones you plan to achieve in the next six months?
We will open up the Beta to a wider number of physicians as we transition fully into the Earned brand. As part of this expansion, we’ll continue to enhance our client and advisor technology to enable seamless, increasingly automated, and reliable data-driven recommendations, along with expansion of our career-related offerings.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
Each situation is different so we don’t feel we are in a position to offer guidance.
Where do you see the company going now over the near term?
We are keeping our heads down focused on delivering massive value to our clients while we build our offering. We’ll continue to be a trusted place for physicians to get their wealth and career questions answered, not only because we’re the experts, but because of the results we consistently evidence.
What’s your favorite restaurant in the city?
NY offers so many choices, but if I had to choose only one it’d be Yakiniku Futago. Always great to catch up with my daughter over charcoal-grilled Korean!
